Mosman Mayor disputes "Fit for the Future" reforms

27 February 2015

Mosman Mayor Cr Peter Abelson today presented his findings from a wide-ranging economic paper which disputes the State Government’s “Fit for the Future” financial criteria to Local Government Professionals Australia’s NSW LG Forum on government reform.

Presenting his analysis, Smoke and Mirrors: Fallacies in the NSW Government’s Views on Local Government Financial Capacity, to the forum, Dr Abelson, an economist who co-wrote the paper with Macquarie University Associate Professor Dr Roselyne Joyeux, disputes the claim that larger councils are more financially sustainable than small ones.

The paper, which has been accepted for publication by the international refereed journal Public Money and Management, mirrors earlier findings by the Productivity Commission that show financial capacity is fundamentally a function of the income of the local community, not of scale.

“This has important and fundamental implications for the structure of local government and amalgamation policies,” Cr Abelson said. “There is no basis for the belief that larger councils are necessary for financial sustainability and this paper shows the equation of scale with financial capacity is both baseless and incorrect.

“One reason is that small councils can develop effective partnerships and outsourcing arrangements as Mosman has done extensively with the Northern Beaches group of councils known as SHOROC and with other councils.”

Mosman Council this week invited ratepayers to vote on its continued independence and three proposed amalgamation options with nearby councils in response to the NSW Government’s proposal.

Other options include a “mega merger” proposed by the Independent Local Government Review Panel and supported by the NSW Government of Mosman, North Sydney, Lane Cove, Hunters Hill, Willoughby and two thirds of Ryde council and mergers with either North Sydney or Manly.

The Mosman community has long supported independence with 81% of voters in the 2012 election opposing amalgamation with any other area. More information is available at mosman.nsw.gov.au.